Many-to-many correspondence: methods and systems for replacing interbank funds transfers

ABSTRACT

By establishing a correspondence account in each Financial Service Provider (FSP) of a group of FSPs and a secure inter-FSP messaging mechanism, transfers of funds entirely within member FSPs (FSP  1 , FSP  2 , FSP  3 , FSP  4 ) may be combined with secure messaging to effectively transfer funds between buyers in one FSP (FSP  2 ) and sellers in another FSP (FSP  1 ) without actual transfer of funds between FSP&#39;s.

BACKGROUND OF THE INVENTION

1. Cross Reference to Related Applications

The subject matter of the present application is related to the subjectmatter disclosed in co-pending and commonly assigned U.S. patentapplication Ser. No. 09/272,056, entitled “Methods And Systems ForSingle Sign-On Authentication In A Multi-Vendor E-Commerce EnvironmentAnd Directory-Authenticated Bank Drafts” filed on Mar. 18, 1999; Ser.No. 09/405,741, entitled “Methods And Systems For Carrying OutDirectory-Authenticated Electronic Transactions Including ContingencyDependent Payments Via Secure Electronic bank Drafts” filed on Sep. 24,1999; Ser. No. 09/490,783, entitled “eDROPSHIP: Methods And Systems ForAnonymous E-Commerce Shipment” filed on Jan. 24, 2000, and Ser. No.60/285,771 filed on Apr. 23, 2001 entitled “Methods And Systems ForCarrying Out Contingency-Dependent Payments Via Secure Electronic BankDrafts Supported By Online Letters Of Credit And/Or Online PerformanceBonds”, the disclosures of which are hereby incorporated herein in theirentirety.

2. Field of the Invention

The present invention relates to methods and systems for low cost andhigh-speed transfers of funds between bank accounts and the accounts ofbuyers and sellers.

3. Description of the Related Art

Inter-bank transfers are expensive when carried out on a per-transactionbasis. These costs are not significantly reduced even when theprocessing of such transfers is carried out on a batch basis. This istrue whether the funds are transferred by clearing credit card chargesor when transferring money through the ACH (Automated Clearing House)network or other networks used by financial institutions to move moneyand information around. Not only are inter-bank transfers expensive, butthey are also slow. High cost is only one problem associated withtraditional inter-bank transfers; the long delay inherent in executingsuch transfers is another. Although most current Electronic FundsTransfers (EFT) are usually executed in a single day, this falls farshort of “Internet Time”, in which transfers of money and informationmust flow in real time, as transactions are executed and informationexchanged.

What are needed, therefore, are methods and systems for decreasing boththe cost and delay traditionally associated with the transfer of fundsbetween banks.

SUMMARY OF THE INVENTION

It is, therefore, an object of the present invention to provide methodsand systems for decreasing both the cost and delay traditionallyassociated with the transfer of funds between Financial ServiceProviders (FSPs).

In accordance with the above-described objects and those that will bementioned and will become apparent below, the present invention is amethod of transferring a payment to a seller having an account at afirst FSP from a buyer having an account at a second FSP, the first FSPowning a first account at the first FSP and the second FSP owning asecond account at the second FSP. The method may include steps ofestablishing a second correspondence account at the second FSP, thesecond correspondence account being owned by the first FSP; debiting thepayment from the buyer's account and correspondingly crediting thepayment to the second account; debiting the payment from the secondaccount and correspondingly crediting the payment to the secondcorrespondence account, and sending a secure message to the first FSP,advising the first FSP that the payment has been transferred to thesecond correspondence account and requesting that funds corresponding tothe transferred payment be credited to the seller's account.

The first FSP may carry out a step of debiting the payment from thefirst account and correspondingly crediting the seller's account uponreceipt of the message. A step of establishing a first correspondenceaccount at the first FSP, the first correspondence account being ownedby the second FSP may also be carried out. The method may also include astep of receiving an acknowledgment from the first FSP, theacknowledgment at least indicating receipt of the secure message by thefirst FSP and/or indicating that the payment has been credited to theseller's account. A fee may be assessed from the buyer, the seller, thefirst FSP and/or the second FSP, for example. The buyer's account and/orthe seller's account may include, may be or may be tied to a credit,debit, bank or payment card, for example.

The present invention is also a method of transferring a payment to aseller having an account at a first FSP from a buyer having an accountat a second FSP, comprising steps of establishing a secondcorrespondence account at the second FSP, the second correspondenceaccount being owned by the first FSP; debiting the payment from thebuyer's account and correspondingly crediting the second correspondenceaccount, and sending a secure message to the first FSP, advising thefirst FSP that the payment has been transferred to the secondcorrespondence account and requesting that funds corresponding to thetransferred payment be credited to the seller's account.

The first FSP may own a first account at the first FSP and may carry outa step of debiting the payment from the first account andcorrespondingly crediting the payment to the seller's account uponreceipt of the secure message. A step of establishing a firstcorrespondence account at the first FSP may also be carried out, thefirst correspondence account being owned by the second FSP. Anacknowledgment may be received from the first FSP, the acknowledgmentindicating receipt of the secure message by the first FSP and/or thatthe seller's account at the first FSP has been correspondingly credited,for example. A fee may be assessed from the buyer, the seller, the firstFSP and/or the second FSP, for example. The buyer's account and/or thesellers account may include, may be or may be tied to a credit, debit,bank and payment card, for example.

The present invention may also be viewed as a method of transferring apayment to a seller having an account at a first FSP from a buyer havingan account at a second FSP, the second FSP owning a second account atthe second FSP. The method may include steps of establishing a firstcorrespondence account at the first FSP, the first correspondenceaccount being owned by the second FSP; debiting the payment from thebuyer's account and correspondingly crediting the payment to the secondaccount, and sending a secure message to the first FSP, advising thefirst FSP to debit the payment from the first correspondence account andcorrespondingly credit the payment to the seller's account.

A second correspondence account may be established at the second FSP,the second correspondence account being owned by the first FSP. Thefirst FSP further may carry out a step of debiting the payment from thefirst correspondence account and correspondingly crediting the paymentto the seller's account upon receipt of the message. An acknowledgmentmay be received from the first FSP, the acknowledgment at leastindicating receipt of the secure message by the first FSP and/or thatthe seller's account has been correspondingly credited. A fee may beassessed from the buyer, the seller, the first FSP and/or the secondFSP. The buyer's account an/or the seller's account may include, may beor may be tied to a credit, debit, bank and payment card (or other formsof electronic money), for example.

The present invention is also a method of transferring a payment throughan FSP to a seller having an account at a first FSP from a buyer havingan account at a second FSP, the FSP maintaining a first account for thefirst FSP and a second account for the second FSP, comprising the stepsof debiting the payment from the buyer's account; sending a first securemessage to the FSP, instructing the FSP to debit the payment from thesecond account and correspondingly credit the payment to the firstaccount; receiving a second secure message from the first FSP, advisingthe second FSP that the payment has been transferred to the seller'saccount.

The FSP further may carry out a step of securely notifying the first Pof the crediting of the payment to the first account. The first FSP maycarry out a step of crediting the payment to the seller's account andsending the second secure message to the second FSP. The FSP may includea Central National Bank or the Federal Reserve Bank (in the case whereinthe FSP is located in the United States), for example. Alternatively,the FSP may include an issuer of a credit, debit, bank and payment card,for example. The method may further include a step of assessing a feefrom the buyer, the seller, the first FSP and/or the second FSP. Thebuyer's account and/or the seller's account may include, may be or maybe tied to a credit, debit, bank and payment card, for example.

The present invention may also be viewed as a method for an organization(such as a credit card company, bank, etc.) to intermediate between abuyer transferring a payment from a buyer account at a first FSP to aseller account at a second FSP, the FSP maintaining a first account forthe first FSP and a second account for the second FSP, comprising thesteps of receiving a first secure message from a first FSP, the firstsecure message instructing the FSP to debit the payment from the firstaccount and correspondingly credit the payment to the second account;after receiving the first secure message, debiting the payment from thefirst account and correspondingly crediting the payment to the secondaccount, and sending a second secure message to the second FSP, advisingthe second FSP of the crediting of the payment to the second account andinstructing the second FSP to correspondingly credit the payment to theseller's account.

The present invention, according to another embodiment thereof, is amethod for a card issuing company to transfer a payment from a buyerhaving a buyer account at a first FSP to a seller having a selleraccount at a second FSP, each of the first and second FSPs maintaining acorrespondence account for the card issuing company, comprising thesteps of debiting the payment from the buyer account and correspondinglycrediting the payment to the card issuing company's correspondenceaccount at the first FSP; sending a first secure message to the secondFSP, the secure message advising the second FSP that the payment hasbeen credited to the card issuing company's correspondence account atthe first FSP; receiving a second secure message from the second FSP,the second secure message advising the first FSP that the payment hasbeen debited from the card issuing company's correspondence account atthe second FSP and credited to the seller account.

According to still another embodiment thereof, the present invention isa method for a card issuing company to transfer a payment from a buyerhaving a buyer account at a first FSP to a seller having a selleraccount at a second FSP, each of the first and second FSPs maintaining acorrespondence account for the card issuing company, comprising thesteps of receiving a first secure message from the first FSP, the securemessage indicating that the payment has been debited from the buyeraccount and credited to the card issuing company's correspondenceaccount in the first FSP; responsive to receiving the first securemessage, debiting the payment from the card issuing company'scorrespondence account in the second FSP and correspondingly creditingthe payment to the seller account, and sending a second secure messageto the first FSP, the secure message advising the first FSP that thepayment has been credited to the seller account.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of a system and method for carrying outinter-FSP funds transfers, according to an embodiment of the presentinvention.

FIG. 2 is a block diagram of additional systems and methods for carryingout inter-FSP funds transfers, according to another embodiment of thepresent invention.

FIG. 3 is a block diagram of another system and method for carrying outinter-FSP funds transfers, according to another embodiment of thepresent invention.

DESCRIPTION OF THE INVENTION

The present invention may be implemented independently of the iDraft™and eDropShip™ systems disclosed in the above-listed U.S. patentapplications, although enhanced functionality may be achieved if thesystems and methods disclosed herein are utilized in conjunction withthe present invention.

An embodiment of the present invention is shown in FIG. 1. FIG. 1 showsa plurality of FSPs (of which only four are shown in FIG. 1), labeledFSP1, FSP2, FSP3 and FSP4. Within the context of the present invention,the term “FSP” shall be understood to include all financial servicesinstitutions accepting deposits of cash, negotiable securities,marketable shares/stock into numbered (or otherwise uniquely-identified)accounts and honoring checks, drafts and/or other customer instructions,given that such institutions know their clients within the meaning ofrelevant U.S. and other banking regulations. Such a definition includes(but is not limited to) traditional banks and savings institutions,stockbrokers, online trading concerns, credit unions and any institutionthat legally identifies with and has some financial relationship with anaccount holder and that has the ability to honor customer or accountholder instructions referring to specific accounts. Each of the FSPs ofFIG. 1 holds a plurality of depositor accounts DEPOSITOR ACCTS and oneor more accounts owned by the FSP itself. For example, the account ownedby FSP1 is identified in FIG. 1 as FSP1 OWN ACCT. Likewise, the accountowned by FSP2 is shown in FIG. 1 as FSP2 OWN ACCT, that of FSP3 as FSP3OWN ACCT and the account owned by FSP 4 is shown as FSP4 OWN ACCT.

In addition, each of the FSPs FSP1, FSP2, FSP3 and FSP4 may form part ofan association, called “FSP ASSOCIATION” in FIG. 1 for convenience. TheFSP ASSOCIATION may include a standard setting body and a body thatregulates membership in the association, as well as polices the behaviorof the member FSPs, to insure compliance with membership guidelines aswell as compliance with all applicable federal and state banking laws.Each of the member FSPs of the FSP ASSOCIATION, according to the presentinvention, also includes a correspondence account for each of the otherFSPs of the FSP ASSOCIATION. Indeed, FSP1 includes a correspondenceaccount for each of the FSPs FSP2, FSP3 and FSP4, labeled as FSP2 CORR.ACCT, FSP3 CORR. ACCT and FSP4 CORR. ACCT, respectively. Likewise, thecorrespondence accounts held by FSP FSP2 include FSP1 CORR. ACCT, FSP3CORR. ACCT and FSP4 CORR. ACCT. Similarly, the correspondence accountsheld by FSPs FSP3 and FSP4 include FSP1 CORR. ACCT, FSP2 CORR. ACCT,FSP4 CORR. ACCT and FSP1 CORR. ACCT, FSP2 CORR. ACCT, FSP3 CORR. ACCT,respectively. Each FSP, therefore, holds a correspondence account foreach of the other FSPs in the FSP ASSOCIATION. The correspondenceaccounts are accounts that are owned by the correspondence and held byother FSPs. Thus, there is a Many-To-Many correspondence relationshipamong the several FSPs. Some of these correspondence accounts may remaindormant, with zero balances. Some of the correspondence accounts,however, may allow the rapid and inexpensive transfer of funds betweenmember FSPs. That is, using the correspondence accounts according to thepresent invention, funds may be transferred from a buyer's account atone FSP to the seller's account at another FSP at what is believed to benearly the lowest attainable cost.

Suppose now, for purposes of illustration, that FSP FSP1 is the seller'sFSP (the FSP in which the seller maintains an account) in sometransaction for the sale of goods and/or services and that the FSP FSP2is the buyer's FSP (the FSP in which the buyer maintains an account) forthat same transaction. The seller, therefore, maintains an account atFSP1 (called SELLER'S ACCT in FIG. 1) and the buyer maintains an accountat FSP2 (called BUYER'S ACCT in FIG. 1). According to the presentinvention, payment on a transaction may be made without any money(electronic or otherwise) flowing between the buyer's and seller's FSPs;that is, from BUYER'S ACCT in FSP2 to SELLER'S ACCT in FSP1. Indeed,according to an embodiment of the present invention, when payment on atransaction (an iDraft™ transaction, for example) is to be made, moneyshould flow from the buyer's account to the seller's account. That is,money should be debited from BUYER'S ACCT in FSP2 and be credited toSELLER'S ACCT in FSP1.

To do this according to the present invention without causing money toflow between FSP1 and FSP2, the buyer's FSP FSP2 may debit (with thebuyer's pre-authorization) an amount of money at least equal to paymenton the transaction (say $100) from the buyer's account BUYER'S ACCT andtransfers it into its own account FSP2 OWN ACCT. Thereafter, FSP2 maytransfer the $100 from FSP2 OWN ACCT into the correspondence account forFSP1. Therefore, there has now been an intra-FSP transfer of fundsentirely within FSP2 at least equal to the payment for the transaction.The buyer has performed, in that an appropriate sum (in this case, $100)has been debited from its account BUYER'S ACCT for payment on the goodsand/or services underlying the transaction between the buyer and seller.Now, instead of FSP2 transferring $100 to FSP1 (through ACH, forexample), FSP2 may send FSP1 a secure message (referenced in FIG. 1 asthe cloud bearing the legend ACH/VPN (Virtual Private Network)/AnyEncrypted Link indicating that funds at least equal to the amount ofpurchased goods or services have been transferred by the buyer's FSPFSP2 to the seller's FSP's correspondence account FSP1 CORR. ACCT at thebuyer's FSP FSP1. Having received this secure, (encrypted, for example)message from the buyer's FSP FSP2, the seller's FSP FSP1 may nowtransfer $100 (in this example) from its own account FSP1 OWN ACCT intothe seller's account at FSP1, namely, SELLER'S ACCT. In one advantageousembodiment, the message is sent by software at FSP2 and is configured tobe read by software at FSP1, without human intervention. The seller hasnow received the benefit of the bargain; namely, payment for the goodsand/or services transferred to buyer. Money, therefore, has effectivelyflowed from the buyer's account BUYER'S ACCT at FSP2 to the seller'saccount SELLER'S ACCT at FSP2 without any actual transfer of fundsbetween the two FSPs.

Such transactions may occur many times during the course of a singleday. Each FSP within the FSP ASSOCIATION may decide when and whether totransfer the funds on deposit in their correspondence accounts at otherFSPs back to them or may move funds in any manner permitted by normalelectronic banking operations. As the correspondence accounts may beinterest-bearing accounts, funds on deposit therein need not liedormant. Should any FSP wish to transfer funds it has on deposit in itscorrespondence account at another FSP, it may do so via ACH, forexample, at the end of the day or at any time and in any manner, asknown to those of skill in this art. In this manner, a single inter-FSPtransfer (carried out at the transferor FSP's convenience), may collectthe proceeds of many individual transactions, thereby allowing furthereconomies of scale.

The practical result of the present invention is very close to aninstantaneous transaction from the buyer and seller's point of view,executed through the agency of their respective FSPs. The cost of movingmoney intra-FSP from one account to another is very low. Furtherreduction in expense comes from the inherent balancing of buyer andseller transactions where, as in FIG. 2, the correspondence account isused to fund a transaction within the buyer's or seller's FSP. Thus,transaction savings are produced and delays in payment greatly reduced.The present invention requires that FSPs act on the payment advice theyreceive as secure messages describing the transactions and that theseller's FSP transfers funds into the seller's account based upon thereceived payment advice.

According to the present invention, the secure message between the FSPsmay include some or all of the following information:

An identification of the buyer sufficient to authenticate the buyer tothe satisfaction of the buyer's FSP;

An identification of the seller sufficient to authenticate the seller tothe satisfaction of the seller's FSP;

An identification of the buyer's FSP;

An identification of the seller's FSP;

An amount to be transferred from the buyer to the seller and

A unique reference number or other unique transaction identifier.

The secure message, for example, may be formatted in Extendible MarkupLanguage XML).

Fees may be levied at each or selected stages of the above-describedprocessing of the payment on the transaction. For example, the feesassociated with the payment may be entirely borne by the seller, or maybe apportioned between the buyer and the seller, according to apreexisting agreement. In the case wherein the fees are borne entirelyby the seller, a portion of the fees may be deposited in the seller'sFSP's own account (FSP1 OWN ACCT in FIG. 1) and another portion of thefees levied from the seller may be deposited in the buyer's FSP's ownaccount (FSP2 OWN ACCT in FIG. 1). Permutations of the above arepossible, by agreement between the FSPs. The fees assessed may be low,benefiting the buyer, whereas the present invention benefits the sellerby providing near instantaneous payment thereto.

One of the paradoxes of modern credit is that FSPs profit little fromtheir best customers; i.e., those that are in the best financialcondition and those that do not regularly use revolving credit. FSPs mayeven lose money on customers that pay their credit card bill in fullevery month. The present invention allows FSPs to levy a small fee andgenerate revenue for each transaction carried out on behalf of theirvery best customers (and all customers who use this service), therebymitigating the effect of providing such customers with free creditand/or other forms of deferred payment services. Moreover, the buyer, byvirtue of the near instantaneous payment to the seller, may negotiate asmaller price for the goods and/or services underlying the transaction.

Receipts may be generated for both the buyer and seller to provide arecord of the execution of the transaction and the transfer of fundsbetween the parties thereto. Moreover, the unique reference number mayprovide a convenient instrument with which to query the FSPs' databaserecords, to obtain historical data relating to the payment, either forthe FSPs' own purposes, for law enforcement or other purposes, forexample. Transactional anonymity may be assured, as the buyer may beauthorized to query the FSPs' records based upon the unique referencenumber, whereas the seller (who only has the right to receive money)need only learn the identity of the buyer's FSP or an alias thereof.

The cost of transferring funds in this manner is believed to besubstantially lower than the cost of transferring money between FSPs inthe conventional manner. Indeed, if the cost of transferring moneybetween accounts within a single FSP is denoted by LC (Lowest Cost) andthe cost of generating, sending and receiving the secure message betweenthe FSPs is denoted by CM (Cost of Message), then TC (the Total Cost oftransferring money from the buyer's account to the seller's account) maybe approximated by the equation TC=(2×LC)+CM, which may the lowestattainable cost for a two FSP transaction. For transaction involving nFSPs, the equation becomes TC=(n×LC)+(n×CM).

Each of the buyer and seller's accounts may be coupled to an overdraftprotection account, as shown in dashed lines in FSP2. In that case, theintra-FSP transfers may actually take place between the FSPs' ownaccounts and the parties' overdraft accounts.

FIG. 2 shows additional embodiments of the present invention. FSP3 andFSP4 have been omitted for clarity of illustration, as has been thecloud representing the secure link through which inter-FSP messagingoccurs according to the present invention. Also omitted from FSP1 andFSP2 are the respective depositor accounts, as well as thecorrespondence accounts FSP3 CORR. ACCT and FSP4 CORR. ACCT, again forclarity of illustration. As shown in FIG. 2, to effectuate paymentbetween the buyer and seller, the buyer may transfer or cause to betransferred the amount corresponding to the purchase of the goods and/orservices ($100 in the current example) from the BUYER'S ACCT to thebuyer's FSP's own account FSP2 OWN ACCT, as shown in step S1. FSP2 maythen generate a secure, (encrypted, for example) message to FSP1,advising FSP1 of the transfer and other details of the transaction andinstructing and authorizing FSP1 to transfer a corresponding amount($100) from FSP2's correspondence account FSP2 CORR. ACCT in FSP1directly into the seller's account SELLER'S ACCT in FSP1. Again, fundswere transferred between buyer and seller without any transfer of fundsbetween the FSPs at which the buyer and seller maintain their accounts.Alternatively, funds may be transferred directly from BUYER'S ACCT toFSP1's correspondence account FSP1 CORR. ACCT at FSP2, as shown at stepS1′. Thereafter, a secure, (encrypted, for example) message may begenerated by FSP2, advising FSP1 of the transfer and of other details ofthe transaction, and requesting and authorizing that FSP1correspondingly credit SELLER'S ACCT from its own account FSP1 OWN ACCT,as shown at S2′. In all cases, one or more secure (encrypted, forexample) acknowledgment messages may be sent back to the FSP thatoriginated the first message. The acknowledgement message(s) may includean acknowledgement of receipt of the first message and/or confirmationthat the requested funds transfers have indeed taken place.

As shown in FIG. 3, the correspondence accounts need not be maintainedby the FSPs themselves. Indeed, the correspondence accounts for FSP1 andFSP2 may be held by an organization such as a credit card company, abank or some other FSP. According to one embodiment of the presentinvention, the organization may include the United States FederalReserve Bank system (hereafter, FRB). In other countries, theorganization of FIG. 3 may be that country's Central National Bank. Inthe United States, the FRB already maintains accounts for all of themajor and most of the minor FSPs in the United States and is able totransfer money between these accounts as authorized by the associatedFSPs. According to this embodiment of the present invention, these FRBaccounts serve as proxies for the correspondence accounts describedrelative to FIGS. 1 and 2. This embodiment of the present inventionfurther reduces the cost of maintaining the Many-To-Many relationshipdescribed herein, because it is the FRB (or other Central National Bank)and not the individual FSPs that maintains the correspondence accounts.In its simplest form, this embodiment enables a transfer of fundsbetween two FSPs to be carried out by a funds transfer between the FRBaccounts of the two FSPs and some secure messaging, just as if fundswere, in fact, transferred to the correspondence account held by one ofthe two FSPs.

FIG. 3 assumes that the buyer in a given transaction maintains anaccount called Buyer Acct in FSP2 and that the seller maintains anaccount in FSP1 called Seller's Acct. The ORGANIZATION (such as the FRB,for example) maintains a correspondence account called FSP2 ACCT forFSP2 and a correspondence account called FSP1 ACCT for FSP1. To transfera payment from the buyer to the seller according to this embodiment ofthe present invention, the buyer's FSP FSP2 may debit the payment (andoptionally a fee, as agreed upon by the parties) from the Buyer's Acctand may credit the payment to FSP2′s own account (within FSP2), FSP 2OWN ACCT, as shown at S31. A secure message may then be sent to theORGANIZATION as shown at S32, instructing the ORGANIZATION tocorrespondingly debit the FSP2 ACCT correspondence account by the amountof the payment (and optionally a fee, as agreed upon by the parties) andcorrespondingly credit the payment to the FSP1 ACCT correspondenceaccount, the account owned by the Seller's FSP FSP1 and held by theORGANIZATION. This transfer between correspondence accounts is shown atS33. As shown at S34, the ORGANIZATION may then send a secure message toFSP1, advising FSP1 of the crediting of the payment to FSP1 ACCT, FSP2'scorrespondence account held by the ORGANIZATION. Upon receipt of thesecure message from the FSP, FSP1 may then credit Seller's Acct as shownat S35, from its own account FSP 1 OWN ACCT, for example. Lastly, S36calls for another secure message to be sent from FSP1 to FSP2, advisingFSP2 that the payment has been transferred to Seller's Acct, thuscompleting the payment transfer from Buyer to Seller and theconfirmation thereof to the buyer. Each of the secure messages,according to the present invention, may be followed by anacknowledgement from the recipient of the secure message to the senderthereof. Note that funds have effectively changed hands from the Buyerto the Seller without any money physically or electronically movingacross institutional boundaries: the only transfers that occurred werewithin FSP2, within the ORGANIZATION or within FSP1. At some later time(or immediately), FSP1 and/or FSP2 may wish to transfer some or all ofits funds on deposit with the ORGANIZATION to its own accounts, eithersingly or as a batch transaction. Such a transfer may be desirableshould any of the correspondence accounts FSP1 ACCT and/or FSP2 ACCTaccumulate an excess of funds, in the judgment of the owner of thecorrespondence account. In conventional fund transfers (such as FedWire,for example), normal settlement does not occur until some time after theseller's FSP FSP1 has received the actual transfer of funds, oftenincurring considerable delays and per-traction expense. The Many-To-Manypayment scheme disclosed herein changes this conventional mechanism ofinter-FSP funds transfers in favor of a secure messaging-basedsettlement mechanism coupled with fast, low cost and secure intra-FSPfunds transfers.

According to further embodiments of the present invention, Seller's Acctand/or Buyer's Acct may be, include or be tied to a credit card, a debitcard, a bank card, a payment card or any other form of electronic money.The card issuing institution may, at its option, charge interest onnegative balances and/or pay interest on positive balances in theSeller's Acct and/or the Buyer's Acct. The risk of fraudulent purchasesand/or activity is minimal, as the identities of both the buyer andseller remain known by their respective FSPs. Every credit cad customershould be known to the issuing FSP if a credit, debit or any other cardis to be used in conjunction with iDraft™ and/or the present invention.Smart cards to aid in establishing identity and in accomplishingauthentication may also be advantageously employed within the context ofthe present invention. In all cases, the buyer's FSP preferably vouchesfor the buyer as a known client and the seller's FSP vouches for theseller, who is the recipient of the funds transfer (to prevent moneylaundering, for example).

Likewise, the ORGANIZATION may be or include a card issuing institution,such as a credit card company, for example. Preferably, cards areauthenticated by a FSP if the transaction is over an amount set byagreement between the buyer and the FSP. According to a furtherembodiment of the present invention, the ORGANIZATION, as a card issuinginstitution, may hold correspondence accounts for all of the FSPs withwhich it does business. A buyer, in this manner, may make a purchasefrom a seller using a card from a card issuing institution with whom thebuyer does not even have an account. For example, if the ORGANIZATION isa VISA® card issuing institution, the buyer may carry out a VISA®transaction, even though the buyer may not have a VISA® account, as theonly transfer from the Buyer's Acct is to the FSP's own account (FSP 2OWN ACCT in FIG. 3) and the only transfer to the Seller's Acct is fromthe seller's FSP own account (FSP 1 OWN ACCT in FIG. 3).

Alternatively, the seller's and the buyer's FSPs themselves may maintainthe card issuing company's correspondence accounts. Indeed, FSP1 andFSP2 may each maintain a correspondence account for the card issuinginstitution, called the Card Issuing Institution Account or CIIA in FIG.3. Although only one such CIIA is shown in FIG. 3 in each of FSP1 andFSP2, it is to be understood that each FSP may maintain such a CIIAcorrespondence account for each card issuing institution, such as VISA®,MASTER CARD® and the like. In this case, instead of FSP2 crediting theFSP 2 OWN ACCT with the payment debited from Buyer's Acct, the CIIAaccount at FSP2 may be credited with the payment debited from theBuyer's Acct, as shown at S31′ in FIG. 3. A secure message may then besent to FSP1 as shown at S36′, instructing FSP1 to debit the CIIA inFSP1 and to correspondingly credit Seller's Acct, as shown at S35′. Anacknowledgment may then be sent to FSP2, advising FSP2 and/or the Buyerof the completion of the transfer. Fees may be assessed at any stage ofthe above-described transaction, as agreed upon by the parties thereto.Note that this embodiment does not require the ORGANIZATION to maintainthe correspondence accounts FSP1 ACCT and/or FSP2 ACCT, as thecorrespondence accounts are held by each of the FSPs FSP1 and FSP2 thatare party to the transfer.

In like manner, each card issuing institution may (if allowed by thebylaws of the institution), according to the present invention, maintaincorrespondence accounts for each of the other card issuing institutions,thereby providing the Many-To-Many relationship between each of the cardissuing institutions and enabling funds to be effectively transferredacross the institutional boundaries of such card issuing institutionswhile moving only secure messages (and not funds) across thoseboundaries. Of course, when and if the CIIA correspondence accountsaccumulate excessive funds, the owners of those accounts may decide totransfer all or a portion of those funds on deposit. Such transfers maybe triggered by some event, such as a balance threshold or a specificinterval, date and/or time of day, for example. In this manner, when atransfer of funds across institutional boundaries does occur, thetransfer may represent a cumulative amount representative of manyindividual transactions, thus further decreasing the cost oftransferring money.

The present invention is a payment mechanism and not a credit mechanism.Indeed, all credit must be secured outside of the Many-To-Many frameworkdescribed herein. In this manner, the transfer of funds according to thepresent invention does not require credit checks and does not burdentransactions with the risks inherent in extending credit. The cardissuing institutions maintain their existing responsibilities regardingthe management of cardholder's accounts, the authentication of thecardholder and the dissemination and protection of the cardholder'spersonal, financial and business information.

While the foregoing detailed description has described preferredembodiments of the present invention, it is to be understood that theabove description is illustrative only and not limiting of the disclosedinvention. Modifications may occur to those of skill in this art. Thus,the present invention to be limited only by the claims as set forthbelow.

What is claimed is:
 1. A computer-implemented method of electronicallytransferring a payment through at least one Financial Service Provider(FSP) to a seller having an account at a first FSP from a buyer havingan account at a second FSP, the at least one FSP maintaining an accountfor the first FSP and an account for the second FSP, the methodcomprising: receiving, at one or more computer systems associated withthe second FSP, an encrypted electronic request associated with thebuyer to transfer an amount corresponding to the payment from thebuyer's account at the first FSP to the seller; debiting, with one ormore processors associated with the one or more computer systemsassociated with the second FSP, the amount corresponding to the paymentfrom the buyer's account at the second FSP; sending, with the one ormore processors associated with the one or more computer systemsassociated with the second FSP, a first secure encrypted electronicmessage to the at least one FSP, the first secure encrypted electronicmessage instructing the at least one FSP to debit the amountcorresponding to the payment from the account for the second FSP at theat least one FSP and correspondingly credit the amount correspond to thepayment to the account for the first FSP at the at least one FSP;debiting, with one or more processors associated with one or morecomputer systems associated with the at least one FSP, the amountcorresponding to the payment from the account for the second FSP at theat least one FSP and correspondingly crediting the amount correspondingto the payment to the account for the first FSP at the at least one FSP;receiving, at one or more computer systems associated with the firstFSP, a second secure encrypted electronic message from the at least oneFSP advising the first FSP to credit the amount correspond to thepayment to the account for the seller; crediting, with one or moreprocessors associated with the one or more computer systems associatedwith the first FSP, the amount corresponding to the payment to theseller's account at the first FSP; sending, with the one or moreprocessors associated with the one or more computer systems associatedwith the first FSP, a third secure encrypted electronic message advisingthe at least one FSP that the amount corresponding to the payment hasbeen transferred to the seller; and receiving, at the one or morecomputer systems associated with the second FSP, a fourth secureencrypted electronic message from the at least one FSP advising thesecond FSP that amount corresponding to the payment has been transferredto the seller.
 2. The method of claim 1, further comprising notifying,with the one or more processors associated with the one or more computersystems associated with the at least one FSP, the first FSP of thecrediting of the amount corresponding to the payment to the account forthe first FSP.
 3. The method of claim 1, wherein the at least one FSPincludes one of a Central National Bank and the Federal Reserve Bank. 4.The method of claim 1, wherein the at least one FSP includes an issuerof at least one of a credit, debit, bank and payment card.
 5. The methodof claim 1, further comprising: assessing, with the one or moreprocessors associated with the one or more computer systems associatedwith the at least one FSP, a fee from at least one of the buyer, theseller, the first FSP and the second FSP.
 6. The method of claim 1,wherein the buyer's account includes one of a credit, debit, bank andpayment card.
 7. The method of claim 1, wherein the seller's accountincludes one of a credit, debit, bank and payment card.
 8. A methodperformed by one or more computer systems associated with anorganization that allows the organization to intermediate between abuyer transferring a payment from a buyer account at a first FinancialService Provider (FSP) to a seller account at a second FSP, theorganization maintaining an account for the first FSP and an account forthe second FSP, the method comprising: receiving, at the one or morecomputer systems associated with the organization, a first secureencrypted electronic message from the first FSP, the first secureencrypted electronic message instructing the organization to debit anamount corresponding to the payment from the account for the first FSPat the organization and correspondingly credit the amount correspondingto the payment to the account for the second FSP at the organization;debiting, with one or more processors associated with the one or morecomputer systems, the amount corresponding to the payment from theaccount for the first FSP at the organization and correspondinglycrediting the amount corresponding to the payment to the account for theFSP at the organization; and sending, with the one or more processorsassociated with the one or more computer systems, a second secureencrypted electronic message to the second FSP, the second secureencrypted electronic message advising the second FSP of the crediting ofthe payment to the account for the second FSP at the organization andinstructing the second FSP to correspondingly credit the payment to theseller's account.
 9. The method of claim 8, wherein the organizationincludes one of a Central National Bank and the Federal Reserve Bank.10. The method of claim 8, wherein the organization includes an issuerof at least one of a credit, debit, bank and payment card.
 11. Themethod of claim 8, further comprising assessing a fee with the one ormore computer systems associated with the organization from at least oneof the buyer, the seller, the first FSP and the second FSP.
 12. Themethod of claim 8, wherein the buyer's account includes one of a credit,debit, bank and payment card.
 13. The method of claim 8, wherein theseller's account includes one of a credit, debit, bank and payment card.14. A non-transitory computer-readable medium storingcomputer-executable code for intermediating between a buyer transferringa payment from a buyer account at a first Financial Service Provider(FSP) to a seller account at a second FSP, the non-transitorycomputer-readable medium comprising: code for receiving a first secureencrypted electronic message from the first FSP in response to the firstFSP debiting an amount corresponding to the payment from the buyeraccount, the first secure encrypted electronic message providinginstructions to debit an amount corresponding to the payment from anaccount for the first FSP held at an organization and correspondinglycredit the amount corresponding to the payment to an account for thesecond FSP held at the organization; code for debiting the amountcorresponding to the payment from the account for the first FSP held atthe organization and correspondingly crediting the amount correspondingto the payment to the account for the FSP held at the organization; andcode for sending a second secure encrypted electronic message to thesecond FSP, the second secure encrypted electronic message advising thesecond FSP of the crediting of the payment to the account for the secondFSP held at the organization and instructing the second FSP tocorrespondingly credit the payment to the seller account.
 15. Thenon-transitory computer-readable medium of claim 14, wherein theorganization includes one of a Central National Bank and the FederalReserve Bank.
 16. The non-transitory computer-readable medium of claim14, wherein the organization includes an issuer of at least one of acredit, debit, bank and payment card.
 17. The non-transitorycomputer-readable medium of claim 14, further comprising code forassessing a fee from at least one of the buyer, the seller, the firstFSP and the second FSP.
 18. The non-transitory computer-readable mediumof claim 14, wherein the buyer's account includes one of a credit,debit, bank and payment card.
 19. The non-transitory computer-readablemedium of claim 14, wherein the seller's account includes one of acredit, debit, bank and payment card.